Frequently Asked Questions

1. Is it possible to defer the payment of the property tax?

The provisions of the Tax Ordinance provide for the possibility of deferring the date of payment, paying the due tax or tax arrears in installments, as well as of the redemption, in whole or in part, of the arrears and interest for delay (Article 67a of the Ordinance), but only in cases justified by an important interest of the taxpayer or public interest. The deferral / remission / release takes place at the request of the taxpayer, but the request must be justified by an important interest of the taxpayer/public interest.

2. If my company decides not to file an adjustment for 2020, what interest will be charged?

If company X does not submit a declaration for property tax for 2020, interest will be charged on the tax arrears on unpaid tax installments for January (due by 31.01), February (by 17.02) and March (by 16.03). The amount of interest is calculated for each day of delay in payment at the annual interest rate of 8%.

Moreover, persons representing the Company bear penal and fiscal responsibility for a failure to submit a declaration on time and for a late payment of public law liabilities, for which there is a fine (or a penalty of imprisonment in the case of high amounts).

3. Is it possible and how can a company prepare its SPV to reduce rental income if tenants stop paying rent due to market downturn?

The Anti-Crisis Shield has introduced a package of legal and tax solutions, which are aimed at counteracting negative effects of the coronavirus pandemic, and which can be used by entities operating in the real estate market. The available tax solutions involve e.g. extension of CIT payment periods, perpetual usufruct fees or an exemption from the obligation to pay property tax for part of 2020 for entrepreneurs who lost liquidity due to the pandemic.

4. Can my company pay the tax based on the rental income and not the invoices issued? Can it not issue invoices to tenants if it knows that payment will be questioned?

In order to change the rules of invoicing and arrangements for lease agreements, it is necessary to analyze the concluded lease agreements (e.g. in terms of the possibilities of granting discounts, or introducing amendments to the agreement). The lawmakers have provided special solutions for the owners of shopping centers within the Anti-Crisis Shield.

5. My company has not paid VAT tax and wants to apply for a deferral of the payment for another 90 days.

The Anti-Crisis Shield does not provide for an extension of the deadline for the payment of VAT; therefore, it is necessary to apply for a deferral of payment. Due to the fact that the tax obligation has already arisen, it will be an application for the deferral of payment of the tax arrears and interest, which will be charged from the date of the expiry of the payment deadline until the date of submitting the application.

6. My company will have a considerable VAT tax amount to pay. What are the consequences of non-payment?

The Anti-Crisis Shield does not provide for an extension of the deadline for payment of VAT; therefore, it is necessary to apply for a deferral of the tax payment. A failure to pay the tax without submitting the application will entail the risk of additional tax interest and the risk of penal and fiscal liability.

7. Are applications for tax reliefs charged with a 4% extension fee?

No. Pursuant to the Anti-Crisis Shield act, applications submitted during the epidemic emergency or the state of the epidemic declared in connection with COVID -19, or within 30 days after it has been revoked, are excluded from the extension fee.

8. Is it necessary to submit an application to pay PIT advances on employees’ remuneration for March and April before June 1?

No. The deadline for payment of PIT advances has been extended by law until June 1, for taxpayers who “have suffered negative economic consequences due to COVID-19.

9. If my company changes the frequency of invoicing, will this lead to a delay in the VAT payment obligation?

Any changes in the frequency of invoicing should be supported by concluding agreements or annexes to lease agreements.

10. If my company agrees to reduce the rent for several months, must it be agreed upon in advance? Can a rent reduction for the period from April to June be agreed upon in May?

The consent of Company X to reduce the rent may be agreed at any time, but should be stipulated in a signed annex to the lease agreement. If the rent reduction for the period from April to June takes place in May and e.g. the invoice for the rent due for April has already been issued, the reduction will require an adjustment of the invoice and tax settlements. Company X will be obliged to include the adjusted invoice in its CIT and VAT settlements on an ongoing basis, i.e. in the month when the adjustment was issued.

11. Can my company change the way it invoices rent from monthly to quarterly? What will the settlements look like if the invoice for April is issued not at the end of March but at the end of June for the entire Q2 2020?

A change in the provisions regarding the invoicing date requires signing an annex to the lease agreement. Then the invoice issued for the entire quarter will be settled in its last month, i.e. in June for the second quarter of 2020.

 


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